The new case for Bitcoin (and maybe Gold) 5/4/2020

With the recent economic madness, QE infinity, stimulus packages etc., investors are now losing faith in fiat money and are piling into Gold & Bitcoin.

With QE infinity, the US will be exporting its inflation to other fiat currencies of the world (due to increased competitiveness of goods & services), leading to the eventual devaluation of the US dollar which in turn leads to a global currency devaluation.

Current M2 (As of April 2nd 2020)

Depicting the ‘faith’ investors have since 2000. Explaining why the Fed, like many other central banks, targets 2% inflation but except for a short time in 2018 has failed to meet that target since 2000.

An interesting chart from @TaviCosta from Crescat Capital showing that current levels are only seen during recessions.

With QE infinity and money supply at current levels, there is a flight away from fiat money into Bitcoin. Bitcoin has a limited supply of only 21 million of it and the daily production of new Bitcoins is halved after every 210,000 transaction. There it is incredibly scarce unlike fiat money, therefore certainty regarding its intrinsic value to a certain extend.

Weekly Chart

BTCUSD weekly chart, given reasons stated above, looking to long till at least resistance level which should coincide around the 0.786 Fibonacci retracement level at a price of around 10670.

4H Chart

Delving in deeper into the 4hr chart, further confluence is seen as the ascending triangle forming in this timeframe has a profit target at around the same level as before at around 10670

Summary

Given the current unrest within the economy and fear abound. Investors should slowly realised how fiat money is not stable and funds should flow into assets like Bitcoin and Gold and with reasons stated above, #BTC10K might be back given current fundamental and technical analysis.

Published

Originally published on April 5, 2020.